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Future of Manufacturing in Europe (FOME)

10 April 2019

The Future of Manufacturing in Europe was a pilot project proposed by the European Parliament and delegated to Eurofound by the European Commission (DG GROW). The project commenced in April 2015 and ran for four years.

Final report published in April 2019

The pilot project The Future of Manufacturing in Europe is an explorative and future-oriented study. It explores the future adoption of some key game-changing technologies and how this adoption can be promoted, even regionally. The analysis of implications for working life focuses primarily on tasks and skills, not only at the white-collar, tertiary-education level, but also for blue-collar occupations, including a focus on challenges facing national and company apprenticeship systems. The future orientation also includes quantitative estimates of the employment implications of the Paris Climate Agreement, of large increases in global tariffs and of radical automation. It also measures the return of previously offshored jobs to Europe.

Economic background

Economic and labour market developments since 2008 have highlighted the fundamental importance of manufacturing for economies in the global era. Manufacturing has always been vital for R&D and a nation’s capacity for innovation. Its importance for Europe is accentuated by the fact that almost 80% of Europe’s exports are manufactured goods.

There is also much to suggest that we are on the cusp of a new industrial revolution with fast-moving developments in areas such as the internet of things, new materials and green technologies. These technological innovations will lead to a massive increase in manufacturing productivity.

Employment and growth

There will undoubtedly be some negative impacts on employment as firms introduce labour saving technology. However, previous episodes of rapid technological progress have also shown more positive impacts on employment. If productivity improves more rapidly in European manufacturing than elsewhere then European firms can capture new global market share and such scale effects can lead to higher levels of employment. Moreover, new technology can give rise to new products which generate new employment opportunities.

The multiplier effect of manufacturing jobs – the number of jobs created in related sectors – is greater than that for all other sectors meaning that manufacturing makes a disproportionate contribution to broader economic growth. As labour accounts for an increasingly smaller share of total value added, it may become both desirable and feasible to retain manufacturing in Europe. This will stimulate growth in related high-value activities in R&D and other services.